AUD/USD: there is no reason to change the current RBA monetary policy

On
Tuesday, when the next meeting is held, the RB of Australia is likely to
maintain the current level of the interest rate unchanged (1.5%).

After
the previous meeting of the RBA (February 6), a number of macro statistical
indicators worsened: inflation expectations and consumer sentiment
deteriorated, and the level of retail sales decreased, the labor market
deteriorated, and the trade balance deficit doubled.

In a
recent speech to Parliament, the Reserve Bank of Australia Governor Philip
Lowey said that he "would prefer a lower exchange rate". In his
opinion, "there is no reason to raise rates in the short term". Lowey
noted that "inflation remains low," although "business sentiment
is improving".

The key
rate of the RBA remains at a record low of 1.5% for the RBA since mid-2016, and
economists believe that the central bank will not change it after 2019.

The
Reserve Bank of Australia predicts the retention of slow inflation and the
inability to achieve full employment over the next few years.

According
to Philip Lowey, "the strength of the Australian dollar reflects the
weakness of the US dollar". The Australian dollar remains largely a
commodity currency, and an increase in world commodity prices against the
background of the weakening of the US dollar, contributes to the growth of the
Australian dollar.

The
reasons for changing the current monetary policy in the RBA do not see. The
RBA's decision on the interest rate, in practice, will not have a noticeable
effect on the Australian dollar. But data on China's foreign trade balance (in
February) will be published on Thursday (00:30 GMT) may have a much greater
impact on the Australian dollar. China is Australia's largest trade and
economic partner and buyer of its primary commodities (primarily iron ore, liquefied
gas, and agricultural products). The decline in Australian imports to China
could have the most negative impact on the Australian dollar.

This
week, investors will also follow the publication on Friday (13:30 GMT) of data
from the US labor market (for February). The publication, as expected, of
strong values will strengthen the position of the US dollar and give the Fed an
extra trump card in the execution of the planned plan to further tighten
monetary policy in the US. The different focus of monetary policy in the US and
Australia will be the main most important long-term factor in favor of
weakening the AUD / USD.

From the
news for today, we are waiting for the publication at 14:45 and 15:00 (GMT) of
indicators of business activity in the US services sector for February. Despite
the expected slight decrease, the indices remain well above the 50 mark, which
is a positive factor for the USD.

*)An
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